Bank of Montreal will offer a new 10-year fixed-rate mortgage for 3.99 percent starting March 11. Canada’s fourth-biggest bank said it will also lower one of its five-year fixed-rate mortgages by 50 basis points to 2.99 percent as of tomorrow.
The mortgage rates, which carry a 25-year amortization period, will be available until March 28, Frank Techar, head of Canadian banking, said today in a telephone interview. The Toronto-based lender prompted mortgage cuts among rivals when it offered the same rate in January for its five-year mortgage.
“The reaction to our January offer was fantastic,” Techar said. “We think it woke Canadians up to the fact that there are some significant benefits to a 25-year amortization mortgage.”
Bank of Montreal previously only had 10-year mortgages with a 30-year amortization period, which carried a rate of 6.29 percent. The lower rates of these mortgages aims to draw attention to 25-year amortizations as an alternative to longer amortization periods, the bank said.
“We think this product continues to be attractive to our customers and consistent with our objectives in Canada to ensure that we’ve got a stable housing market,” Techar said.